Thanks all for all the posts. I learnt something from each of these.
However I still cannot compile ruby on ubuntu.
Strangely it compiles easily on debian ?!
I posted a question on the ubuntu compiling forum thinking that that is 
more suitable for compiling ruby on ubuntu than the ruby-forum.  However 
since there is no reply I am cross-posting (the link) here
http://ubuntuforums.org/showthread.php?t=389055

I should also mention that I tried Thomas Popisek's debuild approach 
which also didn't work.

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